Managing project portfolios is a necessity for all organizations. Any business’s growth and sustenance depends on a multitude of initiatives—which may relate to investment, innovation, or improvement—and managing those initiatives successfully in a holistic manner is the purpose of a Project Portfolio Management (PPM) system. Whether formally organized or not, any business would have centralized or distributed project management offices (PMO) tasked with organizing and tracking these initiatives. With Project portfolio management, organizations can successfully enable their PMOs and executive management to transform their approach to project management and achieve business growth.
Successful strategy execution is about identifying the right initiatives, which lead to the achievement of the organizational goals. Project Portfolio Management (PPM), thus, helps organizations to:
- Ideate and discover initiatives and projects
- Define and deliberate on the project proposals
- Select and prioritize projects
- Plan and execute well in line with the identified goals and costs
According to a PM Solution survey, ‘Higher PPM capabilities lead to greater ROI.’ The organizations with established PPM processes are in a better state to make more informed and data-driven decisions regularly. Undoubtedly, PPM practices establishment require time, a specific skillset, and organization-wide adoption and support. A systematic approach can ensure more effective adoption and superior results. Here are five steps on how you can implement a successful project portfolio management system for your organization:
1. Establish a strategic approach: Underlining the strategic criticality of PPM processes and systems in the organization is paramount. This involves establishing a framework within which organizational initiatives can be organized. This means the creation of the right organizational structures, accountabilities, and teams. It also sets up a taxonomy or categories structure for various projects within the organization. Thus, an organization should identify strategic categories, priorities, initiative groupings, etc. This can follow overall organizational strategies (say, expansion, new-markets or operational efficiencies, etc.) and incorporate aspects such as business units (BU’s), departments, regions, etc. Also important is to define the key ways in which project success may be measured. This will enable your company’s initiatives to be driven by organizational goals and values. However, introducing PPM requires a change in mindset and processes that will face resistance. Thus the need to identify key stakeholders and effective communication of vision for PPM to win organizational support early on.
2. Organize key processes: Identifying the methods and processes in use for key PPM aspects helps set the stage for a more organized PPM in an organization. This includes processes for ideation, evaluation of ideas, selection of initiatives, budgeting, and resource allocation, tracking, etc. Some of these may be informal and vary sharply across the organization. It is thus important to define common processes, vocabulary, and approaches in line with the overall strategic approach. This can include a comprehensive survey and collection of information for ongoing projects and the projects in the pipeline. This provides an opportunity to review processes throughout the organization. The data collected should address crucial questions like:
- Number of current projects
- Number of upcoming projects
- Number of projects aligned to specific strategic goals
- Accountabilities and organizational involvement
- Time and cost outlays—estimated and actuals
This enables review of these projects as portfolio and identification of issues, such as duplicate projects, interdependencies between projects, high-risk projects, and over-allocated resources.
3. Essential PPM automation: At this stage, the organization is ready for a more sophisticated approach to organizing and analyzing its portfolio of projects. Here a PPM automation system (say, Microsoft Project Online) should be introduced as a common and consolidated PPM system. An essential implementation—which includes the identified projects, test up the process for identifying and evaluating project proposals, incorporates the strategic taxonomy, and enables project progress tracking—is opportune. This allows the PMOs as well as executive management to view various projects as portfolios and gain benefits of enhanced visibility and control. Key aspects here include user adoption—thus involvement, training, and engagement of various teams—and business intelligence (BI) which enables easy and meaningful visibility as relevant to the stakeholders.
4. Go comprehensive: Successful project management goes beyond tracking and visibility. It requires careful consideration of project proposals, planning and budgeting, managing vendors, regulatory, quality, and people aspects. This can require implementation of portfolio selection systems (it might be appropriate for an organization to use the portfolio prioritization tools to optimize on budgets and business gains.), integrating PPM systems with financial, HR, or other operational systems, and expanding the implementation to cover more departments, BU’s or regions. Further automation and insights can be implemented—that is, more targeted or comprehensive reports, automated workflows, or automated actions with connections to other organizational systems.
5. Learn and adapt: After implementation, it is necessary to create a learning and adoption plan. Identify and address any issues or redundancies that come up post-implementation. Look for short, medium, long-term opportunities to refine your PPM strategy. This agile approach ensures the portfolio remains aligned to strategic goals and provides an opportunity to gather feedback from key stakeholders at regular intervals.
Although project portfolio management is not a one-day implementation, the returns are valuable, quick, and meaningful. Project portfolio management is an interactive way to ensure goals are addressed thoroughly and effectively. Seamless PPM practices allow increased productivity and faster innovation all at your fingertips.
